Answer: Bust out is a hybrid credit and fraud problem. Also known as sleeper fraud, it occurs when a consumer applies for and uses credit, often under his or her own identity with the intent of maxing out all available credit and eventually disappearing. These criminals engage in normal transactions and pay consistently like good customers, while planning to ignore the final payment and abandon the account. They may have good credit scores, exhibit satisfactory credit utilization and make regular payments until a short time before the bust out occurs.

A bust out scheme is typically defined by the following behavior:

The account in question is delinquent or charged-off

The balance is close to or over the limit

One or more payments have been returned

The customer cannot be located

The above conditions exist with more than one account and/or financial institution

Bust out is a growing area of fraud for the financial services industry. For organizations across the globe, bust out fraud is not a new problem. However, despite continuous efforts to fight this crime, the losses incurred continue to increase.

To learn more about bust out fraud and how you can identify the potential for a customer to bust out, click here to register for this one-hour webinar: Optimize your fraud defenses: Innovative approaches to address today's fraud trends.

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